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Magic Eden Solana NFT Project to refund users after fake NFTs were sold due to an exploit

Top Solana based NFT project Magic Eden to refund users after fake NFTs were sold due to an exploit

One of the most promising NFT marketplaces built on Solana – Magic Eden experienced a major security breach that led to listing fake NFTs on the marketplace. 25 fake NFTs were sold on the marketplace in 24 hours. On January 4, 2023 the firm said in a statement that the ‘activity indexer’ used for the marketplace and Pro Tools was compromised and allowed it to list fake NFTs alongside the real ones. 

Magic Eden said that 25 fake NFTs were sold in just 24 hours and the firm is currently investigating if the genuine NFTs were affected by the exploit. The two major collections ABC and y00ts were affected by the exploit. The marketplace said it believes the issue has “impacted fewer than 10 collections.

ABC also posted a screenshot of two fake NFTs being sold for 100 SOL (The price of SOL was $13 at the time of sale) which amounted to $2,600.

The NFT marketplace identified the issue and proactively disabled both tools and eliminated the gates that allowed the unverified NFTs to get listed on the platform. The platform also asked the users to perform a ‘hard refresh’ of the platform’s website to ensure that no fake NFTs show up on the browser session. 

“Magic Eden is safe for trading and we will refund all the users who mistakenly bought unverified NFTs specifically due to this issue,” the platform announced. 

“Your NFTs are safe and Magic Eden has not been hacked,” the marketplace tweeted. “Unfortunately, you might’ve seen some um, unsavory images. Make sure you do a hard refresh on your browser to fix it, the firm added. 

On Tuesday, users reported pornographic images from the sitcom series ‘The Big Bang Theory’ in place of NFTs. According to the marketplace the issue was linked to its third party image caching service. The NFT marketplace did not share the image caching service partner due to security concerns.

DeGods, the creator of y00ts, also tweeted that there was an exploit on Magic Eden that allowed unverified NFTs to be listed as part of the collection.

​​The Magic Eden exploit is the latest setback for the NFT marketplace, which saw global monthly sales nosediving to 86 percent in December compared to its all-time high of $4.9 billion in January last year, according to data tracker CryptoSlam.

Magic Eden’s market position and finances 

Magic Eden raised $27 million in March, 2022 before securing another $130 million in capital at a $1.6 billion valuation just three months later. The NFT marketplace start up’s investors include Sequoia Capital and Electric Capital.  The infamous Alameda Research, the digital asset trading firm co-founded by beleaguered crypto fraudster Sam Bankman-Fried, was an investor.

The Solana Non-Fungible Token (NFT) marketplace has seen an uptick in activity over the past month, in terms of ‘Unique Active Wallets’ (UAW), transactions and volumes, according to DappRadar. Magic Eden is the top dApp on Solana, with more than 136,000 UAW in the past 30 days, more than double in comparison to its competitor ‘Opensea’. Among popular NFT marketplaces on any chain, Magic Eden ranks 2nd to OpenSea in terms of users.

More about Magic Eden 

Magic Eden is a Solana Network NFT platform that facilitates the buying, selling, and minting of NFTs. The NFT transactions are very similar to Ethereum transactions, except that users will have a 0% listing fee and only a 2% transaction fee, lowering the entry barriers for both new and experienced NFT buyers and creators. SOL tokens are the fee payment method. With a market share of more than 90% in secondary trading volume on Solana, Magic Eden offers the most liquidity to creators.

Additional Read: Why did Solana Price fall by over 65% in the Last 30 Days?

Source: Cointelegraph

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